Penske Automotive - Comparative Multiple Analysis

Penske Automotive (Comparative Multiple Analysis)

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Notes on the Comparative Multiple Analysis of Penske Automotive

WikiWealth compares Penske Automotive's revenue, EBITDA, and EBIT multiples to their peers in order to determine the appropriate fair valuation. Click in the top right corner to experiment with Penske Automotive's comparative analysis.

Notes from the analysis:

1. WikiWealth uses quantitative measures to determine the multiple range for Penske Automotive.
2. Free cash flow to the firm (FCF) multiple is free cash flow to equity holders plus interest owed to Penske Automotive's debt holders.
3. Multiples incorporate benefits due to economies of scale; WikiWealth compares absolute enterprise value multiples to competitor's multiples.
4. WikiWealth excludes outliers when calculating individual company multiples.

Helpful Information for Penske Automotive's Analysis


How does this work? The Comparative Investment Analysis determines the value of Penske Automotive by comparing Penske Automotive financial ratios, prices, growth rates, margins, etc. to those of relevant peer groups.

Value Investing Importance? This method is widely used by investment professionals to determine the correct price of investments, especially initial public offerings (IPOs). It is one element of WikiWealth's three Wall Street approaches used to determine the correct fair value of Penske Automotive.

See the Penske Automotive cash flow (DCF) analysis for a completely different approach that's popular on Wall Street for determining the value of an investment in Penske Automotive.

Also, see the Penske Automotive's buffett intrinsic valuation analysis for WikiWealth's attempt to replicate the investing formula's used by Warren Buffett and Penske Automotive's valuation conclusion for a quick summary.